- banks and the rally,
- the real tech move, and
- Amazon's savvy shoe deal.
We Can't Lose the Banks Here
Posted at 3:50 p.m. EDT, July 21, 2009 I am never going to go against Helene Meisler on the banks. That group is one of the three pillars of the earlier move in this market, the one off the bottom in March, along with tech and oil. I know we need that group even as we managed to rally without it late in the day. But we can't afford to have the banks go bad on top of oil, even if we picked up health care courtesy of a faltering plan by President Obama and we revved up the industrials courtesy of cost cuts at PPG Industries ( PPG), Eaton ( ETN) and now Caterpillar ( CAT). Now it looks like we are losing the banks even as I haven't seen anything I wasn't expecting. We knew JPMorgan Chase ( JPM) and Goldman Sachs ( GS) were going to be great and that the regionals had it tough. We are coming back to the notion that perhaps the FDIC should have forced Regions Financial ( RF) or KeyCorp ( KEY) or some of the other faltering banks to merge a la 1990 when they didn't have any choice. Or at least we broke up the losers and gave them to winner banks like Fulton Financial ( FULT) or Glacier Bancorp ( GBCI) or FirstMerit ( FMER). I have already said that Wells Fargo ( WFC) could reverse the fortunes of the group. But I also acknowledge that we will stall out here if we lose oil and banks because we cannot advance forever with tech, health care and industrials, even as I like those stocks as winners going forward. We need the banks for a broad-based rally. We can rally narrowly without them, but that's not one that we can be excited about. At the time of publication, Cramer was long Wells Fargo, JPMorgan, Goldman Sachs and PPG.
This Tech Move Is Real
Posted at 4:05 p.m. EDT, July 22, 2009 This Nasdaq streak is worth worshipping. I can't believe it. Mark Haines of CNBC is right -- perhaps, at last, it is a repudiation of what happened at the beginning of this decade when everyone decided that tech was just poison. But given the base, I think that the move makes sense. Remember that this move started when the average Nasdaq stock was down 80% from its high. Eighty percent! When you consider where Cisco ( CSCO) or Intel ( INTC) or Microsoft ( MSFT) traded back then, you know that not only was it overinflated to the nines, now that we have a new product cycle worth crowing about -- smartphones and mobile Internet -- it got underinflated. Before we even had this new, great secular growth driver, when there was nothing really exciting, but after the fall from dot-com grace, stocks like Cisco and EMC ( EMC) and Intel were much, much higher. To me, it is time to recognize that we won't get overstretched until we get back to pre-Lehman 2008 highs -- the Goldman Sachs call that preceded this whole move. Why not? We were up there on the strength of GDP, not a product cycle. Now we have worldwide GDP coming back -- no dispute there -- a weaker dollar coming and a product cycle. The group deserves to advance on that litany, even if the 11-day rally seems a little too good to be true. Remember, though, you may think it is too good to be true, but for those who want to sell stock here, it is true as true can be. At the time of publication, Cramer had no positions in stocks mentioned.
Amazon's Savvy Buy
Posted at 1:51 p.m. EDT, July 23, 2009 Amazon's ( AMZN) brilliant. It has become the ultimate merchant for everything. It, at last, is Wal-Mart ( WMT) online. Zappos is a generational site -- it's where all the teenagers know to shop. It is a generational buy, using a currency that's rich but should be rich. As with the Kindle, Amazon knows what the young people want and knows that it isn't paying premium price at the mall. As someone who has shopped endlessly for my kids on Zappos, which basically has everything that my kids need at the lowest price, I recognized this as the creation of the complete virtual mall, devoid of sales tax, delivered quickly to your home. We know the market loves it, because when you see that stock climb on the issuance, you have a home run. In the 1980s when I first heard of Wal-Mart I was incredibly skeptical. Who were these guys out of Bentonville, Ark.? How can they hope to go national? Then I visited one -- I was just blown away by the price and the execution. That's how I feel about Zappos. That's how I felt about Amazon, but just for books, still, just for books. Not anymore. At the time of publication, Cramer had no positions in the stocks mentioned.